Fin 101 Stock Review - Fin 101 Stocks Par Value 1 Legally...

Fin 101 – Stocks!●Par Value 1Legally, represents a stockholder’s minimum financial obligation in the event the corporation is liquidated ●Dividends 1The firm has no legal obligation to pay common stock dividends ●Maturity 1Generally has no specific maturity date ●Priority to Assets and Earnings 1Dividends can be paid only after the interest on debt and the preferred dividends are paid ●Residual owners ●Control of the Firm (Voting Rights) 1Common stockholders have the right to elect the firm’s directors and to vote on shareholder’s proposals, mergers, and changes in the firm’s charter ●Preemptive Right 1Some stockholders have the right to purchase any additional shares of stock sold by the firm Equity Instruments in International Markets ●American Depository Receipts 1Certificates created by banks that represent ownership in stocks of foreign countries ●Foreign Equity 1Yankee stock 2Euro stock

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